The number of investors allocating towards exchange-traded funds (ETFs) will increase 35 to 50 per cent in the next two years in the wake of the current proliferation of products, according to an ETF report from BetaShares and Investment Trends.

At the end of 2010 there were 53,500 investors with some exposure to ETFs, but the report tipped that to rise 72,000 or potentially as high as 80,000 by the end of 2012, the report found.

The was a similar increase in the two years following an increase in the number of products around 2005, and the pattern is similar to that seen in more established markets such as the US, according to Investment Trends principal Mark Johnston.

The survey was based on responses from 7,811 investors and 778 advisers at the end of 2010, and found the average ETF investor had $53,000 invested in ETFs at an average of $22,000 per trade. Three in five investors stated their next alternative investment was likely to be in ETFs.

Almost three quarters of all investors who used ETFs had a self-managed super fund, according to the report.

The proportion of investors who discussed ETF use with their adviser jumped from 18 per cent in 2009 to 30 per cent in the current survey, and the proportion of advisers who stated they currently recommended ETFs increased from 15 per cent in 2008 to 27 per cent in 2010.

“Planners who are embracing the structure typically have above average funds under advice and inflows,” said Drew Corbett, head of investment strategy and distribution at BetaShares.

Sign up for our FREE email newsletters

Get the news, views, comments and opinions on the issues that matter to you.

&amp;amp;lt;p&amp;amp;gt;Your browser does not support iframes.&amp;amp;lt;/p&amp;amp;gt;Newsletter

ABOUT SMSF ESSENTIALS

SMSF Essentials aims to empower both financial services professionals and every-day consumers by providing information on and solutions for such SMSF issues as trustee rights and responsibilities, investment strategies, licensing, taxation, property, borrowing, insurance and governance and regulation. Backed by the experience and expertise of Money Management's journalists and technical writers, it is a vital resource for anybody involved in Australia's rapidly evolving DIY super space.